Ford Motor Co.’s stock shot higher Wednesday after a quarterly earnings beat, with analysts focusing on an unsung side of the business and an above-expectations 2024 guidance, but remaining cautiously optimistic about the carmaker.

Ford Pro, Ford’s
F,
+4.35%

unit dealing with fleets and commercial customers, “continues to be the hidden gem within Ford,” UBS analyst Joseph Spak said in a note Wednesday, echoing similar sentiment from several others.

Ford late Tuesday guided for earnings before interest and taxation of $8 billion to $9 billion from Ford Pro, and about $7 billion to $7.5 billion from Ford Blue, its unit focused on traditionally powered vehicles. The company guided for another loss for Model E, its EV unit, to the tune of $5.0 billion to $5.5 billion.

Ford Pro’s fourth-quarter revenue rose by 11% year-on-year, while Ford Blue’s was flat and Ford’s Model E’s revenue rose 4% and came in below consensus.

“Pro continues to be a standout and one of the best businesses in all of autos,” RBC analyst Tom Narayan said in his note.

Ford on Tuesday reported fourth-quarter earnings that topped Wall Street expectations by a big margin, called for a “solid” 2024, and unveiled a special dividend. The carmaker also said it would launch a next-generation EV to rival Tesla’s future “Model 2.”

The better-than-expected financial snapshot did little to turn Ford bears into Ford bulls, at least for the time being.

Of the 24 analysts covering Ford and polled by FactSet, 11 have a hold rating on the stock, nine rate the stock a buy, and the remaining four rate it a sell.

Some upside is to be expected, however, besides the favorable post-earnings stock reaction. Consensus estimates are “likely rise and confidence around Ford’s execution grows,” Citi analyst Itay Michaeli said.

“Pro is Ford’s ‘Ferrari’ (or the closest thing to it),” but it remains to be seen how long can the unit fund losses in Ford’s vertically integrated EV strategy, Adam Jonas at Morgan Stanley said.

Shares of Ford have lost about 7% in the last 12 months, which contrasts with gains of around 20% for the S&P 500 index
SPX.

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